MARKET OUTLOOK

India: Cotton traded steady across major spot markets of north India on Wednesday. Spot cotton prices quoted steady across major spot markets of West India on Wednesday. Cotton lint traded steady across major spot markets of South India on Wednesday. India's cotton arrivals in local markets during the Oct. 1-Dec. 19 period totaled 10.01 million bales, 0.4% lower than in the same period last year, as major producing states including Andhra Pradesh and Punjab recorded sharply lower arrivals while the largest producer, Gujarat, saw a sharp increase. Arrivals in the southern state of Andhra Pradesh fell about 39% to 1.10 million bales of 170 kilograms each, while the decline in Punjab state in the north was nearly 28% to 900,000 bales, according to data issued Wednesday by state-run Cotton Corp. of India. Total arrivals in the southern states declined 34.4% to 1.39 million bales, while in northern states they fell 13% to 2.19 million bales. However, arrivals in the western state of Gujarat, the country's largest producer, rose about 57% from a year earlier to 3.60 million bales. In Maharashtra, another major producer, arrivals were slightly down at 1.90 million bales. Cumulatively, daily arrivals in India, the world's second-largest cotton producer, were at around 200,000 bales as of Dec. 19, unchanged from the previous week, the data showed. The state-appointed Cotton Advisory Board expects India's cotton output to be 29.5 million bales in the crop year that began Oct. 1, down from 30.5 million bales forecast in November. Productivity is expected to fall this year due to delayed sowing as a result of a late monsoon and droughts that hit some states, as well as flooding in October. • Currency: The Indian rupee gained on Thursday in line with regional peers and tracking gains in other Asian shares with traders eyeing the local stocks open after they rose to their highest close since mid-October. At 9:06 a.m. the partially convertible rupee was at 46.75/76 per dollar, stronger than its close of 46.87/88 on Wednesday. ♦ US Cotton Futures finished with small gains Wednesday in two-way business as players slipped away for the year-end holidays, with dealings seen staying slim the rest of 2009, brokers said. The cotton market will close early on Thursday and be shut for Christmas. The market's reopening on Monday will be delayed. Trading in cotton is again shut next Friday, January 1. ♦ In Pakistan, prices were still on the upward march on the cotton market on Wednesday amid talks that the government should or should not ban export of cotton yarn, dealers said. The official spot rate was unchanged at Rs 4,375, they said. In the ready business, rates showed significant rise as approximately 20,000 bales of cotton changed hands between Rs 4325-4550. Phutti prices were higher in Sindh and Punjab at Rs 1800-2250, they added. ♦ In China, 10440 tons of cotton concluded on CNCE's e-market on Wednesday, 780 tons less than the previous session and all cotton was traded on MA contracts. Open interests were 99780 tonnes, 1460 tonnes more than previous. Although ICE cotton went down sharply but auction price rose, CNCE trading kept fluctuating. Open interests kept increasing.

COTTON & TEXTILE NEWS

·         Cotton prices soften in Punjab by Rs 150 per qtl: Cotton prices softened by Rs 100-150 a quintal for the first time in the entire crop arrival season in Punjab and Haryana on account of non-absorption of increased input rates by north based fabric and garment industry. Although the prevailing rates are still higher than last year’s prices, cotton prices have dipped to Rs 3,200-3,300 a quintal after gaining the season’s high of Rs 3,350-3,450 per quintal ten days back, according to traders. Significantly, fibre prices at this time during last year were ruling at Rs 2,550 to Rs 2,700 a quintal. “The correction in (Cotton) rates was absolutely necessary as prices have moved up sharply due to speculative buying taking place. The main factor, which led to fall in prices was non-absorption of rates in fabric and garment sector,” said I J Dhuria, Corporate General Manager, Vardhman Textiles Ltd. Following the increase in cotton prices this year, cotton yarn prices have also rose by 20-25 per cent in the northern region. “The spinning sector was forced to raise cotton yarn prices due to spurt in raw cotton, although rise made in yarn prices was not enough to neutralize the impact of hike in cotton rates,” said an owner of Ludhiana based textile mill while blaming rise in prices to cotton export. Centre’s Cotton Corporation of India has also commenced commercial buying of cotton at prevailing rates in Punjab and Haryana. CCI has so far bought 10,000 bales in Haryana and 8,500 bales in Punjab. “We have also started buying of cotton to sell it to the ginning sector,” CCI, general manager, VP Nagpal said. However, CCI has not been purchasing cotton at MSP rates. Meanwhile, the total arrival of cotton in Punjab and Haryana has reached 8.70 lakh bales and 9.23 lakh bales respectively. Area under cotton in Haryana increased considerably this season to 5.27 lakh hectares against 4.55 lakh hectares in last season, registering an increase of 16 per cent. Similarly, the state is hoping to attain cotton output of 22 lakh bales against 18.58 lakh bales achieved in last year.  Courtesy - The Financial Express